FG Introduces N450 Billion Subscription Offer

Three Federal Government of Nigeria (FGN) bonds totaling N450 billion are being offered for subscription by the Federal Government.

The DMO revealed this in yesterday’s January 2025 FGN Bond Auction Results.

The first bond available is a N100 billion April 2029 FGN bond, which has a five-year reopening period and a yearly interest rate of 19.30 percent. The second offer is the seven-year reopening of a N150 billion FGN bond issued in February 2031, with an annual interest rate of 18.50 percent.

The third offer is a N200 billion, ten-year reopening of a FGN bond issued in January 2035. These bonds are scheduled to go up for auction on January 27 and settle on January 29.

A minimum subscription of N50 million is required to purchase the bonds, which are then offered in multiples of N1,000 at a price of N1,000 per unit.

The DMO explained that winning bidders will pay a price equal to the yield-to-maturity offer that clears the auction volume, plus any interest that has accumulated, for reopenings of previously issued bonds.

The principal amount of the bonds is scheduled for bullet repayment at maturity, while interest is paid on a semi-annual basis. The Federal Government of Nigeria completely backs these bonds, which are imposed on Nigeria’s general assets.

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They are government securities under the Company Income Tax Act and the Personal Income Tax Act, which exempts pension funds and other associated institutions from paying taxes. They also qualify as securities in which trustees may invest under the Trustee Investment Act.

Additionally, the bonds are listed on the Nigeria Exchange Limited and are considered liquid assets for banks’ purposes of calculating liquidity ratios.

The DMO’s offering offers both domestic and foreign investors appealing investment options while reaffirming the government’s commitment to raise money for important national projects and the N13 trillion 2025 budget deficit financing.